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A love letter to home bias and sector gambling dressed as a diversified portfolio

Report created on May 5, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio screams "I only date Americans" with a sprinkle of "let's make things interesting" by throwing almost everything into just three ETFs. It's like deciding your diet will only consist of three types of food because you read somewhere it covers all your nutritional bases. With 75% of the portfolio split evenly between U.S. small cap value and large-cap growth, plus a 25% nod to large-cap value, it's as diversified as a three-flavor ice cream tub. The concept of spreading risk seems to have been interpreted as diversifying between big and small companies, but only if they're within the U.S.

Growth Info

Looking at a CAGR of 9.89% might make you feel like a Wall Street wizard until you realize that this magical number came with a max drawdown of -23.55%. This is the financial equivalent of climbing Everest in flip-flops because you heard the view is nice. Sure, the average return sounds appealing, but when 90% of those returns came from just 6 days of trading, it's like saying you're a professional athlete because you won a race against your nephew.

Projection Info

Monte Carlo simulations with a 10.45% annualized return sound impressive until you remember they're as reliable as a weather forecast two months out. These simulations, based on past performance, suggest your portfolio could swing wildly, with outcomes ranging from "I'm buying a yacht" to "I hope ramen goes on sale." It's like playing financial roulette but convincing yourself you've got a system because you once read a book on probability.

Asset classes Info

  • Stocks
    100%

With 100% of your portfolio in stocks, your approach to risk is like deciding to skydive without a parachute because you've seen people land in water in movies. This all-in approach on equities screams confidence or naivety, possibly both. It's crucial to remember that diversification across asset classes is like having both a belt and suspenders; it might look overcautious until your pants actually start to fall.

Sectors Info

  • Technology
    22%
  • Financials
    19%
  • Consumer Discretionary
    15%
  • Industrials
    11%
  • Energy
    9%
  • Telecommunications
    9%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Basic Materials
    4%

Your sector allocation reads like someone trying to recreate the S&P 500 by memory. With heavy bets on technology and financial services, you're riding the Silicon Valley roller coaster with Wall Street bankers as your companions. This might sound like a thrilling ride until the tech bubble burps or the financial sector gets cold feet. Consumer cyclicals and industrials are your attempts at balance, but it's like adding a salad to a meal of steak and fries; better, but you're still missing a few vitamins.

Regions Info

  • North America
    99%
  • Latin America
    1%

With 99% of your investments in North America, your portfolio has more home bias than a toddler who thinks the only good food is chicken nuggets. This geographic concentration is like refusing to eat at any restaurant that's more than 10 minutes from your house. Sure, the local joint makes a mean burger, but you're missing out on a world of flavors and, potentially, better health—or returns, in this case.

Market capitalization Info

  • Mega-cap
    29%
  • Small-cap
    22%
  • Micro-cap
    18%
  • Mid-cap
    15%
  • Large-cap
    15%

Your market cap allocation is trying to play it both safe and risky by hugging the extremes of mega and micro-caps. It's akin to wearing a helmet in a car but only when driving above 100 mph. While mega-caps bring the illusion of stability, the micro and small caps are your lottery tickets. This strategy might work in a booming market, but when the tide turns, it could leave you stranded.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

Your portfolio's "efficiency" is like saying you've optimized your car by filling the trunk with bricks because it improves traction in the snow. Sure, you might have a specific risk-return ratio in mind, but when the optimal portfolio with the same risk level promises a higher return, it's time to admit your bricks might just be weighing you down. Ditch some weight and consider a more balanced approach.

Dividends Info

  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.70%
  • Avantis® U.S. Small Cap Value ETF 1.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Weighted yield (per year) 1.29%

Your dividends seem to be the only safety net in a portfolio that otherwise enjoys living on the edge. With yields ranging from a paltry 0.4% to a more respectable 1.9%, you're at least getting some cash flow. But relying on dividends from such a narrowly focused portfolio is like putting all your groceries in one bag; it's convenient until the bag breaks.

Ongoing product costs Info

  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Weighted costs total (per year) 0.15%

The one place you've shown restraint is in the costs, with a Total Expense Ratio (TER) averaging 0.15%. Congratulations on not throwing money out the window through high fees. It's like choosing not to order drinks at a restaurant because you know they're a rip-off, which is smart unless you're dehydrated from all the salt in your investments.

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